The three-piece-suit Vandals at the gate

Ridonkulous (0.00 / 0)

I agree that the executive "retention bonus" stuff is ridonkulous.  AIG says in a nutshell they got money from feds with strict instructions on how to use it . . . something like "carry on."  Must have been living in a moral bubble, or an amoral bubble, not to recognize what a violation of public trust it was.  Or it was such a teeny tiny part of the blop of money they got that maybe people wouldn't mind.  Or it was a side note in the continuation of the most successful (to date) larcenous confidence game undertaken in human history.  Or some combination of the above.  Or not.  Whatever, it's certainly something that's stirred up the hornets.

But it's chump change compared to the distributions AIG made to other banks.  Remember when UBS, Deutsche Bank, Barclays, etc. were clamoring for bailouts early on, and people said "no we can't bail out foreign banks..."  Let's stick with AIG, and CITI, and so on (as if there was a useful distinction).  And I remember when nobody in the Bush Admin could tell us where any of the money was spent, but only that a shit load of it was gone.  Bits and pieces of that - where did the money go? -  story are coming out.  UBS got $5 billion of the AIG bailout money, for one.  After they recently paid a $780 million fine for tax fraud (assisting a bunch of rich people to illegally avoid paying US taxes).  Considering UBS was making $300 million/year on this endeavor, $780 million was a good deal for them.  This was a "deferred prosecution agreement" - like getting a speeding ticket, paying fees and getting probation rather than having it go on your record.  

And UBS was hit for $100 million fines in the last 5 years, twice, for money laundering ("repatriating  funds") - could have been war on terra payoffs to the Bush admin.  

And they gave AIG a "buy" rating on 8/5/08, and even kept it at "buy," with their fingers crossed after the Lehman Bros. collapse, on 9/15/08.  Just a few days before AIG went tits up/umm, accepted bailout money...

It's a lot easier for the Washington circus to focus on "bad" people, point fingers and ask for names (disturbing to me).  And come up with things like this excise tax, which they have failed to convince me yet is not an unconstitutional ex post facto bill of attainder.  I've heard it was a Pelosi trap designed to get republicans to cross the aisle and vote in favor of a 90% tax bracket for rich people.  Clever, and the retention bonus thing is an important symbolic issue.  But questions like "why did AIG pay UBS $5 billion of TARP funds?" and "why did AIG pay Barclays $8.5 billion in TARP funds?" are important as well.

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by: Bob Gentry @ Fri Mar 20, 2009 at 17:49:37 PM UTC